Acton Institute Senior Editor Joe Carter joined host Darryl Wood’s Run to Win show on WLQV in Detroit this afternoon to discuss the issue of income inequality from a Christian perspective. The interview keyed off of Carter’s article, What Every Christian Should Know About Income Inequality. You can listen to the entire interview using the audio player below.
In his recent State of the Union address, President Obama has signaled that income inequality will be his domestic focus during the remainder of his term in office. The fact that the president considers income inequality, rather than employment or economic growth, to be the most important economic issue is peculiar, though not really surprising. For the past few years the political and cultural elites have become obsessed with the issue.
But what should Christians think, and how should we approach the issue? Should we also be concerned? And if so, what should we do about it?
Here are ten points about income inequality that every Christian should understand:
Ladies: are you upset that women make only 77 cents on the dollar as compared to men? Are you sure that’s even accurate? It’s time for some straight talk about the so-called “wage gap.”
Video courtesy of the Independent Women’s Forum.
“Today’s welfare state is largely the construction of decades of liberal political activism,” writes James C. Capretta. “If it is failing, and there is strong evidence that it is in many ways, then that is a stinging indictment of the liberal governing philosophy more than anything else.” He argues for more conservative activism on the poverty problem, particularly in education.
An effective conservative critique of existing policies starts with the acknowledgement that a strong social safety net is a must in a modern, market-based economy, and that the safety net built here in the United States, though flawed, has contributed substantially to improving the conditions for the poor. The official measure of the poverty rate is completely misleading in this regard because it does not include transfer programs or the taxes people pay in the measure of income. So, in a very real sense, no matter how much the government spends, the official poverty rate remains unchanged.
But when tax and transfer programs are factored into the assessment, and when the consumption patterns of the poor are examined and not just their cash incomes, the picture changes quite dramatically. The panoply of governmental support programs—Medicaid, Food Stamps, the earned income tax credit, housing vouchers, school lunch programs, and many more—substantially raise the living standards of those who otherwise have very low incomes. (more…)
Acton Institute President Rev. Robert A. Sirico stopped by the studios of TheStreet.com today and spoke with host Joe Deaux about how Pope Francis differs from his predecessors in his approach to economic issues.
The pope is emphasizing “human solidarity,” Sirico said. “He quoted Benedict by saying that globalization has brought us to be close, to be neighbors, but not to be brothers.” Achieving a sense of fraternity is the goal.
We’ve embedded the video for you below.
Man’s nature is to reject it, because it can only be thrust on people by force. The most fallen possession is closer to God’s design for man than malicious egalitarianism. Possession is what God gave me (which I usually (mis)use selfishly and sinfully), whereas equality is what government and society give me, and they give me something that does not belong to them. (The desire for) Equality is from the Devil because it comes entirely from envy.
– Fr. Alexander Schmemann, The Journals of Father Alexander Schmemann, 1973-1983, page 330-331.
(HT: AOI Observer)
Margaret Thatcher once told an interviewer, “Of course, I am obstinate in defending our liberties and our law. That is why I carry a big handbag.” During her time as Prime Minister, Thatcher’s handbag became an iconic symbol of her ability to handle opponents. The term “handbagging” even entered the Oxford English Dictionary (the verb “to handbag” is defined as: (of a woman politician), treat (a person, idea etc) ruthlessly or insensitively) to describe her rhetorical style.
Thatcher’s handbagging usually occurred during Question Time, the hour every day when members of the parliament ask questions of government ministers—including the prime minister—which they are obliged to answer. A prime example is in her last appearance as Prime Minister in the House of Commons, on November 22, 1990. Liberal Democrat MP Simon Hughes taunts her on the subject of income inequality.
Unfortunately there’s a great deal of evidence suggesting America is slouching down the path to Western Europe. In practical terms, that means social-democratic economic policies: the same policies that have turned many Western European nations into a byword for persistently high unemployment, rigid labor markets, low-to-zero economic growth, out-of-control debt and welfare states, absurdly high tax levels, growing numbers of well-paid government workers, a near-obsession with economic equality at any cost and, above all, a stubborn refusal to accept that things simply can’t go on like this.
It’s very hard to deny similar trends are becoming part of America’s economic landscape. States like California are already there — just ask the thousands of Californians and businesses who have fled the land of Nancy Pelosi.
Europeanization is also reflected in the refusal of so many Americans to take our nation’s debt crisis seriously. Likewise, virtually every index of economic freedom and competitiveness shows that, like most Western European nations, America’s position vis-à-vis other countries is in decline.
Is there a way out, even as the “fiscal cliff” negotiations vividly illustrate the inability of Washington’s political elites to take spending and tax problems seriously? Gregg holds out hope: (more…)
Much has been made of income inequality in the United States this election season. Income inequality exists in the United States, more so than almost any other developed nation. Around sixty years ago, America’s Gini coefficient–the best measure of income equality, where zero represents the least inequality and one the most–was .37. Today, it is .45.
These numbers are startling, especially for a country that so proudly proclaims all men to be “created equal.” But, as Matthew Schoenfeld points out in The Wall Street Journal, income equality is a far cry from the equality the Framers preached in the Declaration of Independence.
Schoenfeld’s article, titled “Air Jordan and the 1%”, transposes the issue of income inequality from the public policy arena to the basketball court. For many people in and around public policy, a rising Gini coeffecient is enough to call for economic redistribution. Of course, this narrow reasoning doesn’t hold up in other arenas, as Schoenfeld’s basketball analogy points out:
And that brings us to Michael Jordan, who starred for the Chicago Bulls from 1984 to 1998. In 1986, the Bulls’ median player salary was $300,000. The team’s lowest-paid player made $135,000, and its highest-paid player made $806,000. The team’s Gini coefficient was 0.36. But Jordan’s superstardom increased the team’s popularity and revenues, and by 1998 salaries looked different. The median income was $2.3 million, the lowest was $500,000, and the highest (Jordan’s) was $33 million. The Gini coefficient had nearly doubled, to 0.67.
Jordan’s salary of $33 million consumed over half the payroll, but everyone was better off. The median player in 1998 made more than seven times what the median player made in 1986, while the income of the lowest-paid player in 1998 quadrupled that of his 1986 peer.
Schoenfeld’s analysis calls to mind a line from Alexis de Tocqueville’s Democracy in America. In the book, de Tocqueville claims, “Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.” Equality is certainly a necessary virtue, one that ensures that all can enjoy basic rights and freedoms. But it is not equality alone that generates human flourishing. This is what the Framers, de Tocqueville, and the 1984-1998 Chicago Bulls got right. Humans require freedom and opportunity to fully tap into their inherent creative potential. To return to basketball: Every successful offense is built around creating the best shot, and the opportunity for a slam dunk always trumps a prayer from half-court.
A recent editorial in the New York Times claims that during the 1980s leveraged buyouts “contributed significantly to the growth of the income gap, moving wealth from the middle class to the top end.” First Things editor R.R. Reno explains why the real story is more complicated, more interesting, and explains much more than income inequality:
The upper middle class world responded to the leveraged buyout revolution by upping their commitments to education and economically oriented self-discipline. The old white-collar social contract subsidized three martini lunches and all they represented. Junk bonds put an end to that culture. And the white-collar parents who suffered from that sudden and severe change in corporate culture told their kids that it’s a very tough, competitive world out there, one with no guarantees.
I’ve seen the difference this makes. As college students in the late seventies and early eighties, members of my cohort still presumed the old social contract, which unbeknownst to us was already being broken. We didn’t worry very much about majoring in something practical or lucrative. We coasted along in the decadent final years of post-sixties heedless hedonism, enjoying the youth-culture equivalents of three martini lunches.